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NCTA: FCC's BDS Regs Must Focus on Market Power

The National Cable & Telecommunications Association says it has risked billions of dollars of investment to get into the business data services (BDS) market—a market the FCC says is key to the rollout of 5G—and its reward from the regulator is the potential of rate regs and unbundling that will hurt its chances of reaping the rewards of that risk.

In its comments on the FCC proposal to institute a technology-neutral framework—which means regulating competitors and new entrants as well as incumbents based on an as-yet undefined definition of market competitiveness—NCTA said the FCC's proposal, which was approved along party lines in April, threatens the key goal of fostering facilities-based competition.

NCTA says the key issue is what providers of BDS service, and the answer should be the dominant carriers, not their competitors. "The Commission has long understood that there is never a need to regulate a new entrant because it has no ability to charge unjust and unreasonable prices," it told the FCC.

NCTA says the FCC's reason for the regulatory remake—"technology neutrality"—has no basis in statute and "never has been the basis for imposing rate regulation on companies that do not possess market power."

NCTA does not buy the FCC's tentative conclusion that the BDS marketplace is broken. "Worse, the Commission appears set on a course that will decrease investment and harm competition by not only imposing significant rate reductions on incumbent providers, but also seeking to require competitive providers to share their networks [unbundling] at those newly regulated rates.

"In a stark departure from sound economic and regulatory policy, the Commission proposes to regulate a market that exhibits all of the hallmarks of a well-functioning, highly competitive market," said NCTA.

The trade group said that some 500 companies report providing this service as of 2013, and that is probably an underestimation.

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.